A government project to save money through sharing an IT system
across different parts of the Department for Transport will cost
twice as much to set up as expected and will lead to £80m in extra
costs by 2015, according to a
National Audit
Office (NAO) report.
The plan to share services for human resources, payroll and
finance using a computer system developed by IBM was originally
forecast to cost £55m and save £112m. The NAO has reported that the
costs will now reach £120m and will save £40m.
The central offices of the Department of Transport and two
Department of Transport Agencies, the
Driving Standards Agency and the Driver and Vehicle Licensing
Agency and are taking part in the project.
The NAO report blames changes to initial cost estimates,
inadequate contract management and poor initial implementation for
the
government missing the targets.
Tim Burr, head of the National Audit Office, said it is
disappointing to see a programme to improve efficiency and
effectiveness leaving a government department worse off.
"[Government] departments need to be realistic about the
challenges of implementing shared services and to manage suppliers
effectively. Over the past year, the Department for Transport has
made efforts to improve the performance of the Shared Services
Programme, and it cannot afford to fail," Burr said.
The NAO said that since April 2007, the Department for Transport
has made "considerable efforts" to improve its management of the
programme and to resolve problems with the system.
"It is also focusing on extending the functions available from
the centre to include routine procurement so as to increase
benefits and improve the quality of management information so that
it can identify further savings. Illustratively, if the Department
for Transport were to achieve additional savings of £50 million per
year, there would be benefits worth £84.4 million up to 2015, less
any additional set-up costs," said the NAO.